MILK
Class III milk futures have eliminated any gains over the past month with June closing at the lowest level since March 30. Prices have bounced twice before from this level. It will be interesting to see if it will be able to do this again. Of course, underlying cash needs to dictate whether this will take place again, as it will not repeat this on a technical bounce. Cheese prices will need to increase from the current level and trend higher to see strong buying. Outside markets have an influence on price with the stock market falling significantly again Monday. Energy prices also fell substantially, as inflation is affecting consumer spending. The level of impact this will have on dairy demand is uncertain, but it will definitely have some impact. Corn planting progress reached 22% complete compared to 64% a year ago and a five-year average of 50%. Soybeans are 12% planted compared to 39% last year and a five-year average of 24%.
Average Class III Prices
| 3 Month: | $24.02 |
| 6 Month: | $23.46 |
| 9 Month: | $22.92 |
| 12 Month: | $22.23 |
CHEESE
Block cheese price fell to the lowest level it has been since April 5. Price broke below the trading range it had been in for a few weeks as the market tries to find a level that will attract buyers more aggressively. May, June and July cheese futures now hold a premium to cash. May should hold a premium as most of the pricing for the contract is finished. Futures do not show any hope for higher prices through the end of the year. Of course, this will change depending on what underlying spot prices do.
BUTTER
Price bounced from this level 1 1/2 weeks ago and will hopefully do the same again. Buyers continue to purchase as lower prices unfold. They want to increase ownership now rather than wait to see if price may weaken during the summer. Inventory is increasing but is not improving from last year. Buyers are not concerned over a supply shortage or even tightness at the present time. Some slowing of demand is being seen at the retail level.
OUTSIDE MARKETS SUMMARY
May corn declined 7.75 cents, ending at $7.8450. May soybeans fell 34.50 cents, ending at $16.21, with May soybean meal down $12.30, closing at $411.10 per ton. May wheat declined 13.75 cents, ending at $10.8325. June live cattle gained $0.80, closing at $133.55. June crude oil fell $6.68 per barrel, closing at $103.09. The Dow fell 654 points, while the NASDAQ fell 521 points.
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